5 Under-The-Radar Dividend Giants Yielding 5% Or More

It is sometimes a good idea for investors to do some real digging to search out stocks that are not often talked about. This article will discuss five under the radar stocks that are not household names. Each of these stocks has a market cap of over $750 million and a dividend yield in excess of 5%. Perhaps one or more of these stocks might be a good idea for your portfolio.

Seaspan Corporation (NYSE:SSW) Seaspan has a market cap of $908.42 million with a negative price to earnings ratio. The stock has traded in a 52 week range between $10.21 and $21.33. The stock is currently trading around $13. The company reported third quarter revenues of $154 million, compared to revenues of $111 million in the third quarter of 2010. Third quarter net income was $-122 million compared to net income of $145 million in the third quarter of 2010.

One of Seaspan’s competitors is Teekay Tankers Ltd. (NYSE:TNK). Teekay is currently trading around $13 with a market cap of $212.3 million and a negative price to earnings ratio. Teekay pays a dividend which yields 16.7% versus Seaspan, whose dividend yields 5.8%.

Seaspan is in the business of chartering deep sea container tanker ships. Seaspan has been bleeding cash, and in 2010, the company had net income of $-87.75 million. The company’s year-over-year third quarter net income decreased by $367 million. Seaspan is a growing company which increased its fleet from 55 vessels to 65 vessels over the last year. The company’s third quarter year-over-year revenues increased by 38.7%.

The downside to the company’s growth is that it has incurred a lot of debt ($3.5 billion). The upside to Seaspan's growth was articulated by the company’s CEO who announced that the company’s larger new newbuilt vessels will result in higher revenues and larger dividends. The company has paid a strong dividend since its inception, and currently pays a $0.75 dividend with a 5.8% yield. In addition to the company’s large dividend, the stock price increased by 100% over the last three years. Investing in Seaspan could be speculative and prospective investors should do further research.

Otter Tail Corporation (NASDAQ:OTTR) Otter Tail has a market cap of $780.7 million with a price to earnings ratio of 24.19. The stock has traded in a 52 week range between $17.53 and $23.48. The stock is currently trading around $22. The company reported third quarter revenues of $315 million compared to revenues of $259 million in the third quarter of 2010. Third quarter net income was $6.8 million, compared to net income of $6.1 million in the third quarter of 2010.

One of Otter Tail's competitors is Caterpillar Inc. (NYSE:CAT). Caterpillar is currently trading around $91 with a market cap of $58.9 billion and a price to earnings ratio of 13.89. Caterpillar pays a dividend which yields 2.1% versus Otter Tail, whose dividend yields 5.7%.

Otter Tail is a diversified company with six segments: Electric, Plastics, Manufacturing, Health Services, Food Ingredient Processing, and Miscellaneous. The company’s biggest business is the electric utility business. In the third quarter, the company increased year-over-year revenues by 21% and net income by 12%. Otter Tail has paid a quarterly dividend since 1990 and has increased its dividend twice by 3.4% over the last five years.

Otter Tail is a stock for investors that prefer to hold stocks for the long term. The stock has a low beta 1.03 and a steady stock price. The stock price is down by 5.6% over the last 52 weeks but up by 8.9% over the last three years. The stock's biggest attraction is its $1.19 dividend which yields 5.7%. The company had an operating cash flow of $124.5 million over the last year, so the dividend should be safe. The company does not attract investors that are looking for strong capital appreciation, but income investors should give it some consideration.

One Beacon Insurance Group (NYSE:OB)-- One Beacon has a market cap of $1.48 billion with a price to earnings ratio of 30.85. The stock has traded in a 52 week range between $12.00 and $16.01. The stock is currently trading near the top of its 52 week trading range at around $16. The company reported third quarter revenues of $227 million compared to revenues of $283 million in the third quarter of 2010. Third quarter net income was $-32.9 million, compared to net income of $15.5 million in the third quarter of 2010.

One of One Beacon’s competitors is CNA Financial Corporation (NYSE:CNA). CNA Financial is currently trading around $27 with a market cap of $7.2 billion and a price to earnings ratio of 10.05. CNA Financial pays a dividend which yields 1.6% versus One Beacon, whose dividend yields 5.6%.

One Beacon is a holding company whose subsidiaries provide specialty insurance products and services. One Beacon’s year-over-year third quarter revenues were down by $56 million, and its net income was down by $48 million. The company’s revenues and net income have been in a downward spiral. In 2010, the company’s revenues decreased by 43% and its net income decreased by 190%. The company’s revenues and net income decreased in each of the last four quarters and in the last quarter its net income was in the red ($-32.9).

The company’s key statistics are equally distressing. The company’s twelve month free cash flow is $-265.04, and its year-over-year return on equity is 1.08. In spite of the negative earnings results, the stock price is up by 0.4% over the last 52 weeks. The reason that the stock price has been resilient is because of the generous dividend. The company pays a $0.84 with a 5.6% yield. It has paid its current dividend since 2007, and paid a special dividend of $1.21 on June 15th of this year. I like One Beacon’s dividend but its negative cash flow puts its dividend in jeopardy. Also, I can see no compelling reason to own a stock with such a negative earnings history.

BP Prudhoe Bay Royalty Trust (NYSE:BPT)-- BP Prudhoe Bay has a market cap of $2.46 billion with a price to earnings ratio of 12.13. The stock has traded in a 52 week range between $96.18 and $131.49. The stock is currently trading around $115. The company reported third quarter revenues of $56.7 million compared to revenues of $45.4 million in the third quarter of 2010. Third quarter net income was $56.4 million compared to net income of 44.8 million in the third quarter of 2010.

One of BP Prudhoe Bay’s competitors is the Mesabi Trust (NYSE:MSB). The Mesabi Trust is currently trading around $24 with a market cap of $320.39 million and a price to earnings ratio of 9.94. The Mesabi Trust pays a dividend which yields 19.4% versus BP Prudhoe Bay whose dividend yields 6.8%.

BP Prudehoe Bay is a royalty trust that was set up with assets that were formerly owned by the BP Plc Oil Company (NYSE:BP). The trust does not pay taxes and pays out almost 100% of its earnings. This arrangement results in large dividend payments to its investors. In the last quarter, the trust paid a whopping $1.96 dividend with a 6.8% yield. The amount of the dividend varies from quarter to quarter based on the trust income. Now that the price of oil has moved up to near $100.00 a barrel, BP Prudhoe Bay investors are likely to see higher dividends. BP Prudhoe Bay has paid dividends since 1989 and has sufficient oil reserves to produce income for years to come. In a time of high stock market volatility, this is a relatively safe investment with an extremely competitive dividend.

DCP Midstream Partners (NYSE:DPM) DCP Midstream has a market cap of $2 billion with a price to earnings ratio of 24.06. The stock has traded in a 52 week range between $27.02 and $44.80. It is currently trading around $45. The company reported third quarter revenues of $383.3 million compared to revenues of $239.9 million in the third quarter of 2010. Third quarter net income was $59.5 million compared to net income of $-4.1 million in the third quarter of 2010.

One of DCP Midstream’s competitors is the El Paso Corporation (EP). El Paso is currently trading around $26 with a market cap of $19.89 billion and a price to earnings ratio of $736.86. El Paso pays a dividend which yields 0.20% versus DCP Midstream, whose dividend yields 5.8%.

DCP Midstream is in the business of gathering, storing and distributing natural gas. The company is classified as a pipeline company. DCP Midstream is growing fast and increased its year-over-year third quarter revenues by 59.7% and its net income by 55.4%. It should be note that in the third quarter, DCP Midstream had six insider trading transactions and all were buys.

Also, insiders have a 27% stake in the company. The company is a Master Limited Partnership, which does not pay taxes but pays out the majority of its earnings in the form of dividends. Over the last five years, the company has increased its dividend five times by 573%. It currently pays a $2.56 dividend with a 5.8% yield. Predictably the stock has outperformed, and it is up by 23.8% over the last 52 weeks and 471% over the last three years. Income investors like Master Limited partnerships, and DCP Midstream is one of the best.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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